How Did They Do It?

HOW DID THEY DO IT?

The secrets to turning what you love into a profit

Abe Roder

Published by Abe Roder at Smashwords

Copyright 2013 Abe Roder

Smashwords Edition, License Notes

This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

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CONTENTS

Introduction

Ruslan Kogan – CEO of Kogan.com

Daniel Flynn – Founder of Thankyou Water

Grant Smillie – International DJ and Entrepreneur

Janine Allis – Owner and Co-founder of Boost Juice

Phil Staub – Executive Chairman of General Pants Clothing Co

Naomi Simson – Founding Director of RedBalloon

Carolyn Cresswell – Founder of Carman’s Fine Foods

Michael Klim – Founder of Milk and Co

Five Quick Thank Yous

About the Author

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INTRODUCTION

An introduction as to why and how this book came to be...

Why create this book?

About a year ago I remember reading a statistic that stated that only 5% of Australians reach financial freedom. (Meaning they don’t ‘have’ to work.) It also stated that even less than 5% of people do what they love while achieving financial freedom. So I assumed it must have been around 3 or 4%. I could be wrong but that was my educated guess. Most people... in fact I don’t think I have ever met anyone who wouldn’t love to be able to take what they love, ripple it deep into the marketplace and make a lot of money. It’s a no brainer. But the reality is, very few people manage to achieve it. Living in a ‘land of opportunity’ I was determined to discover what it takes to join this elite few. What does this small minority know and apply that the majority of us do not? These exact questions are why this book was created. You’ll discover the answers in this share-all insight into the minds of the ‘minority’ that have beaten the odds!

What were the criteria for selecting the entrepreneurs? (3 simple rules)

1. They had to do what they love

2. They (or their brand) had to be well known and in the public eye

3. They had to have turned what they love into a highly profitable venture.

My wish for you...

I hope you enjoy reading this book as much as I did in creating it. Collectively the eight entrepreneurs you are about to meet have amassed over $1 billion. If you only take one lesson, tip or piece of advice from this book and apply it – chances are it will be worth more than the small amount you spent on it.

Nothing but love,

Abe

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RUSLAN KOGAN

CEO of Kogan.com

@ruslankogan

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Ruslan is the first person to say yes to an interview for the book. He didn’t hesitate at all, he had no idea who I was, and yet he said yes. I believe this was because he is an extremely generous guy who openly shares his story, especially if given an appealing enough opportunity that might make a difference to someone.

I was 20 minutes early for our meeting at the Kogan Headquarters in South Melbourne. We shook hands and we walked into his board room. He said he had some things to take care of and he would be back in around 15 minutes. I sat there on a squarish table which had about 12 white leather seats around it and waited patiently for him to return. I had heard Ruslan speak around six months earlier at a Young Entrepreneurs conference that I had attended. His story that day and his authenticity when it came to saying things straight down the line made an impression on me. A big impression. He wasn’t copying anyone before him, I thought to myself. He wasn’t trying to replicate any great entrepreneurs of the past and he wasn’t trying to be your stereotypical business leader. He was unique. He was bold enough to speak the truth about what he thought, even if it might confront the whole audience.

He was a breath of fresh air. He was a bit of a rebel and he didn’t care. He was unconventional, in a captivating way. He was himself and he was bloody good at it. It was inspiring. Sitting there waiting for him to come back into his boardroom, I was thinking about all of this and hoping that I would be able to uncover and share more of his story, his beliefs about business and most of all, his passion. He has achieved some extraordinary results in a relatively short period of time. How did he do it all?

If you are someone who likes to do things a bit differently and carve your own way through the woods, then read on. Here is what happened...

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In the beginning Ruslan, how did you go about uncovering and deciding what it was you wanted to do and what you were passionate about?

Well, firstly I have to mention that my parents arrived in Australia in 1989 with just $90 in their pockets. They dropped everything they had in Russia and took the massive risk to move here, without even knowing the language. They had to move here, and then learn English. All of the professional qualifications and skills that they had gained became irrelevant. They worked three or four jobs each just to get by and provide for us. As for me, I can remember being a little kid going through the supermarket and I would say to Mum, Mum, I want this. Mum, I want that. And the answer was always, No, we can’t afford it or No, you can’t have that. So I realised from a very young age that if I wanted something, I was just going to have to work hard and get it myself. I’m a big ‘wanter’. I want a lot of things. I love buying stuff. So as a result, I started my first business when I was nine years old.

I remember living in a housing commission flat in Elsternwick, Melbourne. There was a tennis centre near where we lived. A couple of times a week as I walked to tennis I would pass the golf course next to the tennis court and I couldn’t help but notice these golf balls that people would hit over the fence but were too lazy to pick up.

One day I walked into the pro-shop on the golf course to buy a Slurpee and I realised that they were selling second-hand golf balls for two bucks each and golfers were buying them. So from that point on, each time I walked to and from tennis I would pick up all the golf balls along the fence line, take them home, wash them, and put them in egg cartons. Then on Saturdays and Sundays I would go back to the golf course with the filled egg cartons and I would sell them directly to the golfers for fifty cents a ball. I was making ten or twenty bucks each weekend. It wasn’t huge money, but as a nine year old you quickly become the pimp of the Milk Bar with that sort of cash!

From there, when I was ten or eleven years old I moved on to running a car wash business and then I had a web design business and a mobile phone repair business all through high school. I very quickly realised that technology and computers were a big passion of mine. I built my first computer when I was nine years old. I remember one of the happiest days of my life was when I managed to save up enough money from selling golf balls to upgrade the RAM of my computer from 256 Kb to 512 Kb. What that meant was that I could then run Windows 3.1. It took twelve discs to install and that was awesome for me. (Ruslan is laughing at this point reminiscing about where technology was at that point in time!)

Ever since then, whenever there was a new gadget available or new technology being released, I’d always be into it. I always managed to have the latest mobile phone by buying a broken one, fixing it, selling it, and buying the next one. I have always loved technology and I have a real passion for it.

In year twelve, I finished top of the state in IT, Information Processing and Management. I just loved it so much. I remember when I finished year twelve and came back from Schoolies Week, I sent a letter to IT companies in Melbourne saying, Look, I know I’m young. I’m willing to work for free. You don’t need to pay me anything. Can I please get a job? I went through the Yellow Pages and sent a copy to every single IT company in Melbourne and I didn’t get a single response! Not one! But I persevered and in the meantime I kept growing my online website design business, which is how I started to get into the online space.

At this stage I had received a scholarship to Monash University to study Business Systems, which is a half Business, half IT degree. As part of that degree, I got to spend a semester overseas. In 2003 I was lucky enough to go to Miami and I saw first-hand the rise of online retail there. I was twenty years old at that time.

Now first things first - when you’re young and travelling abroad, you have to get your priorities straight. I got together with all of the international students and we decided that we needed a bar fridge for our dorm room. There were kids from Australia, the UK, France, Italy, and Switzerland; in total about twenty of us and we all caught a train and a bus to Wal-Mart.

We chose Wal-Mart because we had heard all through the university that Wal-Mart was this massive retailer, with huge economies of scale, and no one can beat Wal-Mart, etc. So we bought our little bar fridge from Wal-Mart and we carried it onto the bus, then onto the train and back to our dorm. It was a huge effort (and must have looked pretty comical too!). Then we had to install it. Once it was properly installed we finally got to put our beer in it and enjoyed some cold beers as a reward to ourselves for a hard day’s work.

Now here is where it got really interesting for me: the next day I saw all the American kids and they’d got FedEx drivers wheeling their little bar fridges into their dorm rooms. I was intrigued. We went over and spoke to them and found out that not only did they get the bar fridge delivered to their door step, but they also didn’t have to waste a whole day buying it AND they got it for half the price that we did.

This made me realise very quickly that an online retailer can operate with far greater efficiency than a massive Goliath like Wal-Mart, which is a multi-billion dollar business with mass buying power and huge stores all over America. It was at this point in time I became very aware that small online retailers can sell things much cheaper than huge retail companies. And so the seed was planted…

When I got back to Australia, I resumed a job at General Electric, which was where I had been working for a little while before I left to go to Miami. My position was Network Administrator and I was earning a decent salary. In fact I was earning over $150,000 a year, because I had a specialized skill set. I was a twenty-one-year old and I loved it.

Shortly after my return I quit General Electric to go and work as a Management Consultant at a company called Accenture. They offered me a job for $45,000 a year. I said yes and everyone, including my family, thought I was crazy. Looking back I suppose Accenture sold me the lifestyle; their brochures had people on the front cover sitting with a laptop in the park and I thought that it would be cool work in those kinds of conditions. When I got there, it was the absolute opposite! It was nothing like that. It was the most draining experience of my life.

I stayed there for about a year. The management expected everyone to be in at around 7am and not to leave until around 8pm. Some people would stay late without even having anything to do just because they lived in fear of leaving before their manager. I was not one of those people; I was the rebel of the company. I would get up and walk out at 5pm because I had done everything that I needed to do. I didn’t really care to stay back if I had nothing to do. It just didn’t make any sense to me. When I left earlier than everyone else I would get these dirty looks from everyone, particularly the management.

Then two things happened simultaneously, which led me to start Kogan.

The first thing that happened:

I was assigned to a project at Accenture, which involved data migration to a new warehouse management system for Coles Myer. Each graduate at Accenture was given about 10,000 lines of data to migrate. Our manager said we had one week to complete our 10,000 line migration. I took the data that we were given, looked over it and quickly worked out that there was a pattern in it. Using my computer, I then wrote a script that migrated the data quickly and efficiently. The project was given to us first thing on Monday morning, and by 9:30am on the same morning I had finished my task.

I was excited